SEC Commissioner Hester Peirce told attendees at SIFMA’s Digital Assets Conference that current identity-collection practices are fundamentally broken and pitched zero-knowledge proofs (ZKPs) as an alternative to large-scale KYC/AML data hoarding. She argued the prevailing approach creates ever larger “data haystacks” that both hinder law enforcement and produce centralized repositories attractive to attackers. Peirce proposed attribute-based verification using ZKPs so a user can prove facts — age, citizenship, accredited investor status, or sanctions clearance — without revealing name, address, or Social Security number.
She urged institutions to reuse identity checks rather than repeatedly storing customer details and suggested a greater role for third-party identity verifiers that issue cryptographic attestations users can carry across platforms. Peirce also noted public blockchains’ transparency and tamper resistance as a complementary element to such a framework. Importantly, she framed the remarks as a policy signal, not formal rulemaking: no notice of proposed rulemaking or new regulatory guidance was filed.
The speech landed against recent incidents that underscore her point: Revolut’s exposure of customer passports and full Bitcoin histories after a fraudulent government request, and breaches at a Trezor vendor that exposed tens of thousands of customers and fueled phishing attacks. Speaking in what she described as her penultimate week as commissioner, Peirce reiterated that technology-neutral, cryptographic approaches could reduce privacy risk and the systemic harms of mass data collection without changing existing compliance rules.
This summary is composed by the cFlash AI editor from multiple public sources, under human supervision. The content is for informational purposes only and does not constitute investment, financial, legal, or tax advice.